Virtualization Cost Comparison

This article aims to explore the licensing and support costs associated with different virtualization products that may be considered as replacements to VMware's widely used server virtualization platform. We will evaluate and compare the costs associated with hypervisor (akin to ESXi/vSphere), virtualization management software (akin to vCenter), and commercial software support.

We'll review a number of virtualization solutions, including:

• VMware vSphere Standard and vSphere Foundation (new offerings)
• Microsoft Hyper-V coupled with System Center Virtual Machine Manager (SCVMM)
• Red Hat OpenShift Virtualization
• Oracle Linux KVM with Virtualization Manager
• Citrix XenServer with XenCenter
• Proxmox Virtual Environment (Proxmox VE)
• XCP-ng

A fictitious on-prem virtualization environment (cluster) will serve as the base for our cost comparison. The cluster consist of four physical servers (often called hosts or nodes), each equipped with 2 CPUs with 26 cores per CPU and 512 GB of RAM. The environment hosts 100 virtual machines (VMs) running server-class operating systems (OS). VMs are configured with 4 vCPUs and 16 GB of RAM each.

For each of the products, we'll briefly review the licensing model and pricing, examine availability of commercial support, and estimate the costs to fully license our virtualization cluster described above. The cost estimate will cover:

• Hypervisor licenses.
• Centralized virtualization management software licenses (if licensed separately).
• Commercial software support.

We will not take into consideration:

• Licensing requirements for operating systems or applications running within VMs.
• Any auxiliary software (monitoring, backup, antivirus, etc.).
• Any desktop virtualization (VDI) components.
• Cloud-based deployment.

The summary cost table is provided here, you can review the details for each of the products under the corresponding section below.

VMware vSphere Standard and vSphere Foundation

VMware vSphere Foundation (VVF) is VMware's flagship virtualization offering for on-premise deployments. It provides a full set of virtualization features and management capabilities, including VM migration with vMotion, Storage vMotion, high availability (HA), Distributed Resource Scheduler (DRS) for efficient workload balancing, and Distributed Switch for cluster-level network aggregation. vSphere Foundation offering includes Aria Suite Standard, Aria Operations, Aria Operations for Logs, and Tanzu Kubernetes Grid Service. vSAN can be added as a paid add-on.

VMware vSphere Standard is a virtualization platform designed for small to medium-sized enterprises. It provides essential virtualization features, including VM migration with vMotion, Storage vMotion, and high availability (HA) functionality. It serves as an entry point for organizations looking to benefit from VMware's virtualization technology without the advanced features offered by higher editions and at a lower cost.

Both vSphere Foundation and VMware vSphere Standard include vCenter Standard at no additional costs.

For the full list of features and side-by-side comparison see the VMware vSphere Product Line Comparison document.

VMware no longer offers permanent licenses for the vSphere product family. Both vSphere Standard and vSphere Foundation follow a per-core subscription licensing model. It requires licensing of all physical cores on all CPUs in the environment, subject to a minimum of 16 core licenses per physical CPU.

vSphere Licensing Costs

Yearly subscription pricing (data from February 2024):

• VMware vSphere Standard - $50 per CPU core.
• VMware vSphere Foundation - $135 per CPU core.

The total number of CPU cores in our 4-node cluster is 208. Therefore, the total yearly cost to license our environment is:

• $28,080 for VMware vSphere Foundation,
• $10,400 for VMware vSphere Standard.

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Microsoft Hyper-V with SCVMM

Microsoft virtualization offering is based on the Hyper-V hypervisor included in x64 versions of Windows Server OS.

System Center Virtual Machine Manager (SCVMM), a component of the Microsoft System Centre product family, serves as the centralized tool for managing all components of a virtualized datacenter, including virtualization servers, networking, and storage resources.

Note that a host running free standalone Microsoft Hyper-V Server cannot be managed by SCVMM. Furthermore, while Hyper-V Server is still available for download, it has reached the end of life and Hyper-V Server 2019 is the last version of the product. Hyper-V Server 2019 is out of Mainstream support as of Jan 9, 2024 with Extended support ending Jan 9, 2029.

Hyper-V & SCVMM Licensing

All physical Hyper-V hosts in a cluster require Windows Server Datacenter Edition or Windows Server Standard Edition licenses.

Licensing hosts with Windows Server also provides rights to run Windows Server software in the hosted VMs. The number of allowed VMs differs between the editions. Datacenter Edition license permits an unlimited number of VMs, while Standard Edition license permits for two VMs. Standard Edition licenses can be stacked on a server to increase the number of allowed VMs.

Windows Server Datacenter and Standard licenses are available through a number of Microsoft Volume Licensing programs and offered as perpetual licenses or subscription licenses (SL). Perpetual licenses can be acquired with or without Software Assurance (SA). SLs are valid only for the subscription term and include SA benefits.

Software Assurance provides many software support benefits, including 24x7 problem resolution support and free version upgrade rights.

Windows Server software is licensed under the Per Core/CAL model which requires:

• licensing servers by physical core or by individual VM, and
• licensing users or devices accessing the licensed servers with client access licenses (CALs).

Licensing by individual VM is only available for subscription licenses or licenses with active Software Assurance and is subject to a minimum of 8 core licenses per VM. Such an approach may provide cost savings in some scenarios, but is not suitable for our use case.

The Windows Server per physical core model requires licensing all cores in a physical server with core licenses or equivalent subscriptions, subject to a minimum of 8 licenses per physical processor and a minimum of 16 licenses per server.

For more details about Windows Server licensing see our MS Windows Server Licensing FAQ.

SCVMM requires a System Center Management License (ML) for each VM under management. There are two types of management licenses:

• Server Management Licenses (server MLs) for managed devices/VMs that run server operating systems.
• Client Management Licenses (CML) are required for managed devices that run non-server OS. CMLs are available on a per-device or per-user basis.

We are not going to look into Client Management Licenses in this post.

The System Center Server Management Licenses are available in two editions - Datacenter and Enterprise. The Server ML licensing model aligns with the Windows Server core-based model and has the same mandatory minimums and limits.

Note that Server Management Licenses provide rights to all System Center features, including Configuration Manager, Operations Manager, Data Protection Manager, etc.

The Core Infrastructure Suite (CIS) SKUs - Core Infrastructure Server Suite Datacenter and Core Infrastructure Server Suite Standard provide an alternative way to license Windows Server and System Center together at a discount. Core Infrastructure Suite also follows a core-based licensing model similar to Windows Server and System Center.

Hyper-V & SCVMM Licensing Costs

It is difficult to have a fair cost comparison of a Microsoft virtualization solution vs similar products without taking into account many other factors, such as:

• Existing Microsoft licensing inventory in the organization,
• Hyper-V & Service Center dependency on other Microsoft products, such as Active Directory,
• Windows Server CAL requirements,
• Licensing for operation systems on VMs.

Such analysis is far beyond the scope of this post, therefore we are going to included in our estimate only the following minimal list of items required to license Hyper-V technology for our illustrative 4-node cluster:

• Windows Server Standard Licenses to cover all Hyper-V hosts under the per physical core model.
• System Center Datacenter Server Management Licenses under the per physical core model to cover all VMs in the environment.

License pricing:

• 9EM-00301 Microsoft Windows Server Standard Edition, License & Software Assurance, 2 Cores - $82.99 per year (source: CDW).
• 9EM-00303 Microsoft Windows Server Standard Edition, Software Assurance, 2 Cores - $35.99 per year (source: CDW).
• 9EP-00249 Microsoft System Center Datacenter Edition, License & Software Assurance, 16 Cores - $1,346.00 per year (source: DirectDial).
• 9EP-00251 Microsoft System Center Datacenter Edition, Software Assurance, 16 Cores - $565.00 per year (source: DirectDial).

The total number of CPU cores in our 4-node cluster is 208. Therefore, to license our environment we require 208 Windows Server Standard Edition core licenses or 104 2-core pack SKUs and 208 System Center Datacenter Edition Server Management Licenses or 13 16-core pack SKUs.

The total yearly cost for the first 3 years is $26,128.96. Starting form the 4th year, after the cost of permanent licenses is paid off, the total yearly amount will be reduced to $11,087.96 and will only include the SA payments.

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Red Hat OpenShift

Red Hat OpenShift Virtualization is an add-on to the RedHat OpenShift Container Platform, bringing together Kubernetes-based container orchestration with virtualization capabilities. It allows organizations to run and manage both traditional virtualized workloads and containerized applications on a single, integrated platform.

The management of OpenShift Virtualization is integrated into the Red Hat OpenShift administrator console which provides a unified management interface for containers and virtual machines.

There are two ways to operate and use Red Hat OpenShift: self-managed OpenShift and fully managed OpenShift cloud services.

There are three self-managed OpenShift subscription offerings with different features and price (all include OpenShift Virtualization):

• Red Hat OpenShift Kubernetes Engine.
• Red Hat OpenShift Container Platform.
• Red Hat OpenShift Platform Plus.

Each of the offerings is available in 2 options - core-based or bare-metal, and 2 support levels - Standard 8x5 or Premium 24x7 SLA.

Each core-based subscription allows you to run OpenShift on 2 physical cores or 4 vCPUs. OpenShift subscriptions can be stacked to cover larger hosts.

Bare-metal socket subscription is available only for x86 bare-metal physical nodes where OpenShift is installed directly to the hardware. It covers up to 2 sockets with a total of 64 cores across them. One or more subscriptions can be added for a server with more than 2 sockets or more than 64 cores to cover either the total number of sockets or physical cores in it (whichever is greater).

Fore more details about OpenShift offerings see the Self-managed Red Hat OpenShift sizing and subscription guide.

Red Hat OpenShift Subscription Costs

The total number of CPUs in our 4-node cluster is 8 and since the number of cores per server is less than 64, we need 4 bare-metal socket subscriptions.

For our cost comparison exercise we've chosen the base offering - Red Hat OpenShift Kubernetes Engine Bare Metal with Premium support. The yearly Premium subscription price for this offering is $6,586.99 (source: CDW).

The total yearly costs to cover our cluster with Premium support for Red Hat OpenShift Kubernetes Engine Bare Metal is $26,347.96.

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Oracle Linux KVM

Oracle Linux KVM with Virtualization Manager is an open-source virtualization solution offered by Oracle as a part of the Oracle Linux offering. The core of Oracle Linux KVM is the Kernel-based Virtual Machine (KVM) hypervisor. The Virtualization Manager serves as the centralized management interface.

Oracle Linux follows a subscription-based licensing model, where users purchase support subscriptions to access commercial support and additional features.

The pricing metric for Oracle Linux support subscription is per physical CPU pair. For systems with more than two physical CPUs, users must purchase an additional support subscription for every additional CPU pair in order to cover all of the physical CPUs on the systems running Oracle Linux.

Support coverage for Oracle Linux Virtualization Manager is included in the Oracle Linux Premier Support package.

For more information see the Oracle Linux Virtualization Manager data sheet.

Oracle Linux Subscription Costs

Yearly price for Oracle Linux Premier Support is $1,399.00 per physical CPU pair.

The total number of CPU pairs in our 4-node cluster is 4, hence we need 4 Oracle Linux Premier Support subscriptions with the total cost of $5,596 per year.

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Citrix XenServer

Citrix XenServer is a powerful and feature-rich virtualization platform based on the open-source Xen Project hypervisor.

XenCenter serves as the centralized management console that allows for the management of servers and resource pools (collections of servers) in a simple to use scalable manner.

XenServer is available in the following editions:

• Standard Edition.
• Premium Edition.
• Trial Edition.

The Trial Edition provides all the functionality present in Premium Edition, excluding rolling pool upgrade through XenCenter, and with the restriction on pool size (maximum three hosts).

XenCenter is included in all XenServer editions. For for the detailed edition comparison see the XenServer 8 feature matrix.

Citrix XenServer Licensing and Costs

XenServer is licensed on a per-CPU socket basis. For a pool to be considered licensed, all XenServer hosts in the pool must be licensed. XenServer only counts populated CPU sockets.

XenServer licenses are sold as one year term-based licenses and include maintenance (source: XenServer Pricing and License Tiers).

The total yearly costs to license our illustrative environment with 8 Citrix XenServer Standard Edition licenses is $3,000.

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Proxmox Virtual Environment

Proxmox Virtual Environment (Proxmox VE) is an open-source virtualization platform that combines two virtualization technologies: Kernel-based Virtual Machine (KVM) for virtual machines (VMs) and LXC (Linux Containers) for lightweight container-based virtualization. It offers a web-based management interface for easy configuration, deployment, and monitoring of virtualized environments.

Proxmox VE follows a dual licensing model. The core Proxmox VE platform is open source, and users have free access to the community edition. However, for organizations that require additional features, support, and access to the stable repository, a subscription model is available.

Proxmox VE Subscription Costs

Proxmox VE offers four subscription plans with varying support levels:

• Community - $119 / year & CPU socket.
• Basic - $367 / year & CPU socket.
• Standard - $551 / year & CPU socket.
• Premium - $1,102 / year & CPU socket.

For more details see Pricing for Subscriptions Plans.

To license our 4-node cluster equipped with the total of 8 CPUs, we need 8 Proxmox VE subscriptions. The total yearly cost of Proxmox VE Premium support coverage for our environment is $8,816.

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XCP-ng

XCP-ng is an open-source virtualization platform originally based on XenServer (now Citrix Hypervisor).

XCP-ng provides two main graphic management tools:

• XCP-ng Center (Windows client, only community supported),
• Xen Orchestra web UI (need an XO virtual appliance running).

Xen Orchestra is the officially supported client for XCP-ng. It's currently developed by the same team as the XCP-ng project. For more details see the XCP-ng documentation.

XCP-ng Subscription Costs

While XCP-ng is open source, there are various commercial support plans offered by the project's commercial entity, called Vates:

• Essential - $2000 / year.
• Essential+ - $4000 / year.
• Pro - $1000 / host / year.
• Enterprise - $1800 / host / year.

For the detailed support plan comparison see Subscribe to XCP-ng and Xen Orchestra.

The total yearly costs for XCP-ng Enterprise support coverage for our environment with 4 hosts is $7200.

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See also:
VMware Licensing Calculator
MS Windows Server Licensing Calculator